LTPT YOS credits under age 21

Regular plan eligibility is 1 YOS, 12 months over 1000 hours, age 21, quarterly entry dates.  Assume the January 1 entry date for LTPT and plan year counting of hours.

Employee born 01/2005, hired on 10/04/2021.  Works less than 500 hours in 2021.  Works 784 hours in 2022.  Do the LTPT credit years start for him in 2022 even though he is not yet 21?  Or - do you start counting when he is age 19 (2024) that would make him LTPT eligible in 2026 when he is 21 provided he works more than 500 in 2024 and 2025?  Or do you start counting when he turns 21 in 2026 and he would be eligible in 2028? 

Thanks in advance.....

I would assume you count all service unless the LTPT rule are different than the regular eligibility rules. The minimum age just keeps out someone who otherwise would have met the service condition but does yet met the age condition.

Thanks Lou that was my thought as well.   Relius did not give him LTPT credit for 2022 and I'm trying to ascertain why because the other LTPT people in the plan appear to be receiving the correct credit.    The only difference with him was that he isn't 21 yet.  I know I can hard code the LTPT YOS for him but I don't like to do that.  

I read an article last week on the daily BenefitsLink Retirement Plans newsletter. It was written by a law firm and indicated that the plan must count hours for LTPT purposes in the employee's first 12 months of employment and then can switch to plan years beginning with the plan that starts in the year the first employment year ends. If I understand correctly, that means you need to determine if your employee works 500 hours from 10/4/21 through 10/3/22. If so, there is one year. If your eligibility computation period shifts to the plan year, then you look at 2022 so you potentially have two years for LTPT purposes at the end of 2022 even though the employee did not work 500 hours in 2021. In 2025, when LTPT rules only require 2 years of 500 hours, an employee could easily get 2 YOS for LTPT purposes when they completed barely over 12 months of service.

I think this logic makes it far more complicated than it should be (it's already complicated enough). I hope the law firm is wrong but I doubt they are. Anyone have a different interpretation? It would be much easier to simply determine if an employee had 500 hours in a plan year and credit on that basis.  Just one more thing SECURE 2.0 is trying to make overly complicated IMO.

I believe that if the plan's regular age requirement is age 21, that age can be applied to LTPT employees as well. The change for LTPT employees is to the service requirement, not the age requirement. So I think Relius is doing it right. When he turns 21, in 2026, he would be able to start participating in the 401(k) deferral portion of the plan, provided he has at least 500 hours in three consecutive years from DOH in 2021 to attainment of age 21 in 2026.

Example 1:

2021 - less than 500 hours
2022 - 500 hours +
2023 - 500 hours +
2024 - 500 hours +
2025 - 500 hours +
2026 - attains age 21 and enters on next entry date

Example 2:

2021 - less than 500 hours
2022 - 500 hours +
2023 - less than 500 hours
2024 - less than 500 hours
2025 - 500 hours +
2026 - 500 hours +
2027 - 500 hours +
2028 - enters plan on first entry date in 2028

2 minutes ago, EMoney said:

I read an article last week on the daily BenefitsLink Retirement Plans newsletter. It was written by a law firm and indicated that the plan must count hours for LTPT purposes in the employee's first 12 months of employment and then can switch to plan years beginning with the plan that starts in the year the first employment year ends.

I believe this is right. The plan uses whatever method for counting hours it uses for regular employees, so if the first year is the employment year and the second and following years are the plan year, that's what you use. If the plan uses employment years for all years, that's what you'd use.  I actually think this makes it simpler than having one method for regular employees and a different method for LTPT employees. Everything about determining eligibility is the same as for regular employees, except for number of hours. (I'm not saying implementing this is easy. There's a lot of recordkeeping and the plan document language will be necessarily complicated, but the determination of hours and computation periods shouldn't be overly difficult.) 

Relius is not showing him with the 1 LTPT year of service credit that I think he should have for the 2022 plan year as he worked over 500 hours.  (it shows 0)

If I start crediting for the first year he worked over 500 hours, then shouldn't he be showing 1 year of LTPT service?

I understand the plan can apply the age 21, so he can't enter until 2026 anyway, just trying to determine how the LTPT YOS are counted for him.

I think the question is did the employee work 500 hours from 10/4/21 through 10/3/22? If yes, that is first YOS for LTPT. If document switches to plan year, then 2022 becomes second YOS for LTPT.

I want to confirm on behalf of FIS that Relius Administration is designed and developed (and this has been confirmed in testing) to LTPT count service for individuals < age 21.  If set as an eligibility condition, a participant will have to complete the 2 (or 3) LTPT YOS and attain age 21 to be eligible to enter the plan as a LTPT employee, but the employee does receive LTPT service credit for the years < age 21. 

Based on this, there should be a different explanation (based on census info or plan specs) for why the participant addressed in this question did not receive credit.

Thank you everyone. 

EMoney - I'm looking for why Relius does not show a YOS for 2022 as the participant was definately over the 500 hours whether you look at employment or plan years, he just isn't 21. 

David - I'll recheck the specs and see if I can find anything out of the ordinary.  As previously mentioned, all other LTPT participants are processing correctly for 2022 LTPT credit and the only difference between them and this employee was his age under 21.

edited to add:

Apparently it's too close to 10/15 and I'm a little burned out.  I played around with this last week and thought it was still off.  In checking it this afternoon after I read EMoney and David's posts, it appears all is well and the employee DOES now show with his 1 YOS LTPT credit for 2022.

Many thanks again to all who replied!